Hong Kong lacks commitment to poverty relief

  • A fifth of the city’s population are destitute and instead of arguing about how the data is complied, we should come up with long-term policy measures to tackle the situation
PUBLISHED : Tuesday, 20 November, 2018, 5:38pm
UPDATED : Tuesday, 20 November, 2018, 10:21pm

Another year, another jump in the number of people living below the poverty line. But we can always count on Chief Secretary Matthew Cheung Kin-chung to tell us that everything is fine and dandy.

A fifth of the city’s population, or 1.377 million people, are destitute, according to the latest official figures. This means an increase of 0.2 percentage points to 20.1 per cent; not a big jump? Well, it’s still the highest since 2010. And, during this whole time, our economy was expanding.

In a sense, Cheung is right; the headline numbers are misleading. They don’t factor in public welfare and housing support, as well as non-cash assets, because the government’s poverty line follows “international norms”.

“I don’t think our policies have failed,” he said. If cash handouts were taken into account, the poverty rate would fall to 14.7 per cent, or 1.01 million, about the same as last year.

Of course, without some background on the government’s budget on social welfare, it’s difficult to make sense of the numbers. But before we start, one has to ask: if Cheung thinks the poverty matrices being used don’t reflect the true poverty situation, why do we use them other than to follow “international norms”?

Record 1.37 million people living below poverty line in Hong Kong

Retirees in many Western economies don’t have remotely the same levels of savings as those in Hong Kong.

Some countries such as Singapore provide public housing for large swathes of the population while others don’t. Clearly it’s time we develop poverty matrices that make sense for our city.

Undeniably, the government is spending a lot on welfare. Under the current budget, total welfare expenditure will surge year on year by 30.1 per cent to HK$92.2 billion. At 16.5 per cent of total expenditure, it is the second largest, after education (20.4 per cent). So far, so good for Cheung.

But then, he said our ageing population was making the numbers worse. What? While recurrent welfare spending as a percentage of total recurrent expenditure jumped from 16.3 per cent in 2012 to the current 19.6 per cent, welfare for the elderly stays at around 11 per cent of recurrent welfare spending.

No wonder we are seeing so many elderly poor working on the streets.

Poverty relief is a long-term policy commitment. Singapore is expanding its fiscal revenue base, such as raising the goods and services tax, to prepare for its ageing population.

It’s time we think ahead, too.